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Entain-controlled bookmaker Ladbrokes has been slapped with three maximum penalties in Australia’s Northern Territory, but the nominal size of the fines reinforces the need for reform, the territory’s regulator says.
Ladbrokes was fined a total of A$78,540 ($52,700) by the Northern Territory Racing Commission (NTRC) for breaches of the territory’s Code of Practice for responsible service of online gambling, according to a February 27 judgement released this week.
The case has attracted increased media scrutiny because the gambler at the centre of the findings, financial adviser Gavin Fineff, had been solicited by a Ladbrokes agent to open an account while the former was stealing millions of dollars from his clients.
Fineff is awaiting sentencing in the New South Wales state after pleading guilty to defrauding those clients.
The NTRC found that the Ladbrokes agent breached the “urge to buy” provision of the code by soliciting Fineff’s business in a telephone call.
It also found Ladbrokes failed to respond to two “red flags” for problem gambling behaviour by failing to probe “known significant losses” in the millions of dollars with another bookmaker, and failing to respond to sizable deposits and losses suggestive of problem gambling.
Fineff turned over more than A$17.5m ($11.7m) in his Ladbrokes account, which was active from June 2018 to March 2020, and lost a total of A$758,510, according to the NTRC decision.
But the NTRC considered that the illegal source of Fineff’s funds was irrelevant to sanctions against Ladbrokes and that no refunds should apply as there was insufficient evidence before the company that Fineff was gambling beyond his means.
“Given this … the integrity of each bet placed by the gambler … has not been undermined to the extent where each bet should not be enforced, regardless of the fact that the gambler’s activity resulted in significant losses for him,” the report said.
Anti-gambling federal lawmaker Andrew Wilkie on Tuesday (March 7) welcomed the decision to issue maximum fines, but said they were too small given the seriousness of the breaches.
Wilkie’s statement lamented the fact that Ladbrokes will not return Fineff’s losses to “the victims of his crime”, a scenario that would become compulsory if his 2022 amendment to anti-money laundering legislation is accepted by the government.
The NTRC decision is the latest in a steady drumbeat of adverse findings against Northern Territory-registered corporate bookmakers, which occupy the great majority of Australia's online sports betting space.
It coincides with renewed calls from the territory’s own regulator to dramatically increase penalties ahead of the local legislature’s expected replacement of the Racing and Betting Act 1983 this year.
NTRC chair Alastair Shields told VIXIO GamblingCompliance on Tuesday (March 7) that gaming legislation and codes of practice should be overhauled to align with “modern expectations”.
“I think it is important that the size of the fines be increased,” he said on the sidelines of the Regulating the Game conference in Sydney. He speculated that an upper limit would be closer to A$1m than A$100,000.
“If you look at other law enforcement agencies that operate in this space like the ACMA … they have the capacity to issue fines in the millions of dollars.
“We’ve got sports bookmakers who’ve got turnover, some of them, in the billions of dollars. I think fines in the tens of thousands are clearly out of kilter with what the modern expectations would be.”
Shields anticipates that a beefed-up NTRC will also wield legislation with an expanded number of potential offences, as well as “other regulatory tools such as the capacity to enter into enforceable undertakings with licensees” akin to those used by Australian federal and state agencies.
Other reforms on the way include a draft code of practice for gambling affiliates and – announced for the first time at the conference on Monday – a new auditing process for online licensees.
Australian accounting standards allow for group companies to be audited as a single entity, but Shields said this is not enough for the regulator.
“We’ve found that that wasn’t giving us sufficient information for us to be able to assess the bookmaker itself, and so we’re going to be proposing to operators that we require audited accounts for each entity that is licensed” in the Northern Territory, he said.
Shields is also looking forward to technological advances that can assist licensees in identifying and preventing problem gambling, including artificial intelligence applications that could tag risky records of behaviour and trigger operator intervention.
“I think there’s no doubt that, as more data becomes available on the types of behaviours exhibited by people who experience harm in the long run, that can be used to assist those people to avoid harm,” he said.
